Netflix CEO Reed Hastings received $5.5 million in compensation in 2012

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Dawn C. Chmielewski

Netflix Chief Executive Reed Hastings received about $5.5 million in total compensation last year, a 40% drop from 2011, when his package was valued at $9.3 million.

But Hastings' salary -- like the company's image -- is on the rebound. He is set to receive $2 million in pay this year, four times what he collected in 2012. His stock option allowance will increase to $2 million; up from $1.5 million last year.

Hastings also realized a gain of about $8.4 million last year from the exercise of prior years' option grants, according to regulatory filings.

Chief Content Officer Ted Sarandos, the architect of Netflix's original content strategy and recently named to Time's list of 100 most influential people, was the most highly compensated executive last year.

Sarandos received salary and stock options worth about $6.5 million in 2012. His annual wage is set to double to $2.2 million this year, with a stock option allowance rise to $2 million.

The digital media powerhouse doesn't come close to its old-media counterparts, when it comes to executive compensation. CBS Chief Executive Les Moonves had a 2012 pay package valued at $62.2 million.

Nonetheless, Netflix will ask shareholders to adopt a proposal that would give them a nonbinding say in executive pay. Stockholders also submitted five proposals for investors to consider.

One shareholder resolution, submitted by the Florida State Board of Administration, would require all Netflix directors to stand for election annually. It argued that such a move would make the Netflix board more accountable to investors. The Netflix board recommends against the proposal, saying that the staggered terms provide greater stability.

The California State Teachers' Retirement System proposed that director nominees be elected by a majority vote --instead of a plurality -- in uncontested elections. It argues that the current standard "disenfranchises" shareholders. Netflix directors advised maintaining the status quo to avoid "failed" elections that would result in unfilled board vacancies.

Another shareholder resolution, put forth by the New York City Pension Funds, would require an independent board chairman who is not a current or former Netflix employee, arguing it would enhance the board's oversight of management.

The chairman's position is currently held by Hastings, the company's president and chief executive. The Netflix board advised rejecting the proposal, saying that the chief executive is best suited to serve as board chairman because he's most familiar with the company's business and best able to identify strategic priorities.

One proxy measure seeks to change the corporate governance rules to allow shareholders to make board nominations. The Netflix board opposed the measure, saying its nominating committee is in the best position to propose candidates.

The company's annual meeting will be held June 7 at the company's headquarters in Los Gatos.